STORY: Story:
Chinese President Xi Jinping has just given the strongest signal yet that he is determined to revive the country's housing market.
:: BREAKINGVIEWS
:: Hong Kong, China
:: Chan Ka Sing, China columnist
Last Friday, the State Council said it would encourage local governments to buy swathes of unsold homes nationwide, and up to 1 trillion yuan in new central bank funding will be available.
This is not enough comparing to the size of China's housing hole.
Unsold inventory may be worth over 13 trillion yuan, or roughly $2 trillion, according to Goldman Sachs estimate.
Beijing will want to avoid making the same mistake as the last time it engaged in a nationwide campaign to reduce housing inventory in 2015.
At the time the central bank helicoptered more than 3 trillion yuan to help people affected by shantytown redevelopment to buy new homes.
The result was a property bubble, which burst last year and sent major developers like China Evergrande into default.
How much local governments will pay for property is another big question.
Current homeowners' property values would suffer if local governments acquired nearby apartments at steep discounts.
Creditors won't be happy, either, if state buyers can cherry-pick distressed developers' best assets on the cheap.
This all helps explain Beijing's conservative approach.
But the central government has laid the foundations for providing more support if needed.
